Health Insurance – Opportunities and Challenges Dr. Dayasagar Rao. V DM, FRCP (Canada) FRCP (Edinburgh)
Sr. Consultant Cardiologist Krishna Institute...
Health Insurance – Opportunities and Challenges Dr. Dayasagar Rao. V DM, FRCP (Canada) FRCP (Edinburgh)
Sr. Consultant Cardiologist Krishna Institute of Medical Sciences Hyderabad, Andhra Pradesh
Socioeconomic indicators Land area
2% of world area
Burden of disease%
21% 0f global disease burden
population
16% of world population
Urban ; rural
28;72
Literacy rate %
65.38
Sanitation%
Rural -9. urban 49.3
Safe drinking water supply %
Rural 98; urban 90.2
Poverty %
Below poverty line 26 Rural 27.09,urban -23.62
Poverty line (RS)
Rural 327.56;urban 454.11
Health Insurance •
Health care
cost
– 24% Indian hospitalized single year •
Fare below poverty line ( bpl)
– Large proportion patients (BPL) • •
Borrow money Sell assets
world bank 2002
Health Insurance •
Public sector - state /central teaching hospitals
– District hospitals – Primary health centers •
•
Private sector – 50% inpatient 60-70% ambulatory care Public health investment
– 1.3 % GDP1990 – 0.9 % GDP 20078 •
Central health budget (% of total budget) -1.3%
– State 5.5-7%
Health Insurance
Opportunity
Challenges
-Quality health care -all - Equitable - Affordable - Financing - Containing provider behavior - Cost of treatment
Health Insurance
Public health budget Health care cost Quality health care Necessities - Health care
-
Shrinking Escalating Necessity Financing
Health Insurance
Private health insurance Mandatory health insurance (social insurance) Public health insurance - Subsidized by Govt (arogyasri)
Perceptions about Health Insurance in India What is INSURANCE ?
Buying a Promise
Health Insurance: Key Stakeholders Distribution channel partners Media / Telecom
Health Providers
Customer
NGOs / SHGs / MFIs
Health Insurance Industry
Government
Insurance companies
TPAs IRDA - regulator
India Health Insurance Market Size & Growth Rate Market Size: (INR) - Crores 6000 5125 5000
4000
CAGR – 35%
3209
3000 2222 2000
1732 1354
1000
761
1004
0 FY 2002
FY 2003
FY 2004
FY 2005
Market Size: (INR) - Crores
FY 2006
FY 2007
FY 2008
Health Insurance Plans Health Insurance Plans
Private
Social
Community Based / Micro Insurance
Health Insurance : Need Indian health financing CHALLENGES: Population covered under some form of Healthcare Prepayment
P e rc e n ta g e (% )
16 14 12 10 8 6 4 2 0
Increase in health care costs
High financial burden on the poor
Need for long term and nursing care
14.3
for senior citizens 3.4
5
5
0.9
Increasing burden of new diseases and health risks
Private Social Employer Community Health Insurance Spend Insurance Insurance Healthcare Type
Total
Due to under funding, preventive and primary
care
public
health
functions are yet to meet their objectives.
Source: Mckinsey
and
Private Health Insurance: Issues & challenges faced by Insurance Companies Key Issues Description 9
Limited Influence over healthcare delivery mechanism
High claim ratio
Low level of consumer awareness
9 9
9
9
Limited product development
Limited healthcare delivery network with top few cities Limited bargaining power Insufficient data on consumers & disease patterns, absence of standardization of healthcare costs & significant levels of frauds leading to under-pricing of insurance products and higher value of claims Low level of awareness among consumers about health insurance products and their benefits Insufficient data on Indian consumers & disease patterns and limited control of healthcare delivery network resulting in limited product and pricing innovation
Private Health Insurance: Issues & challenges faced by TPAs Key Issues
Limited influence over healthcare delivery network
Description 9 9
9
Funding support 9
Varying treatment costs across providers due to limited bargaining power Lack of standardization & accreditation in most healthcare facilities leading to difficulty in judging the authenticity of procedures & costs Limited funding support from the Insurance company impacting the claims disbursement time Delays and issues in claims processing leading to negative perceptions by insurance companies & consumers about TPAs
Private Health Insurance: Issues & challenges faced by Re-Insurers Key Issues Description
Limited Data availability
Insufficient data on Indian consumers & disease patterns resulting in difficulty in product development & pricing
Private Health Insurance: Issues & challenges faced by Healthcare Providers Key Issues Description
Pricing demands from Insurance companies
Lack of affordability
9 Lack of standardization and accreditation norms for healthcare providers resulting in unreasonable pricing demands by insurance companies 9 Low health insurance penetration and lack of affordability of the consumers in the tier 2/3 cities and rural areas to support the investment in healthcare infrastructure in these areas
Social / Government Schemes Government Initiatives
CGHS Schemes for Government Employees ESIS Schemes Recent Initiative - covering mass populace PAN India RSBY 9 With participation of health insurer 9 Implemented in 11 states 9 Extended to other section of populace other than BPL
State Government have also initiated several schemes where there is participation of Insurers to run the Scheme
Social / Government Schemes: Issues &Challenges
Catering to Mass Population based on Income criteria 9 Price Pre-fixed 9 A challenge to administrator – TPA working with synergies in NGO’s to ensure a successful model 9 Subsidized schemes 9 To be run on community based models
Health Care for Government Employees & Workers 9 Self Funded schemes 9 Impressive network 9 Covers small segment of population 9 Cumbersome procedure
“No National Health Care Coverage catering different strata segments”
Community Based / Micro Insurance:
Diversity Reach – Distribution Poor checks on pricing & service quality Limited medical infrastructure Cost as a Burden – Affordability Insufficient Data Confidence / Trust building
Issues & Challenges
Health Insurance – Focus Areas
Source: NIA Library
Health Insurance - potential to become a Rs.25000 crores industry by 2012.
No. of Elderly People in the Developing World will TRIPLE in 25yrs. (WHO)
In India, the no. of people above 60 yrs is about 8% today, with that no. expected to hit 21% by 2025. (Asia Insurance Review)
RAJIV AROGYA SRI (Andhra Pradesh)
Health for All? is one of the objectives of the present Government.
To provide health security to the broadest cross section of its population, the Government have introduced Community Health Insurance Scheme called Rajiv Arogya Sri with effective from 1st April, 2007.
It provides financial protection and to improve the health status of families living in BPL for treatment of all the serious ailments. This scheme is made operational covering all the districts in the State since 15th July, 2008.
The scheme helps many an invalid young and elderly patients to resume their livelihood. This scheme ensures health for entire population especially in the vulnerable sections of the society.
Objective of Rajiv Aarogya Sri Scheme To improve access of BPL families to quality medical care for treatment of identified diseases involving hospitalization, surgery and therapies, through an identified network of health care providers. The scheme would provide coverage for the following system 1.
Heart
2.
Cancer treatment
a.
Surgery/Therapy
b.
Chemo Therapy
c.
Radio Therapy
3.
Neurosurgery
4.
Renal diseases
5.
Burns
6.
Poly trauma cases (not covered by the Motor Vehicles Act)
7. Cochlear Implant Surgery with Auditory-Verbal Therapy for Children below 6 years (only services will be provided by the Insurance Company and costs to be reimbursed by the Trust on case to case basis.)
RAJIV AAROGYA SRI (Andhra pradesh)…Contd
The overall picture at the state level No.of Aarogya Sri cards issued (Nos)
618915
No. of operations performed (Nos)
3339
Total amount involved Rs. in lakhs
1086.15
RAJIV AAROGYA SRI (Andhra pradesh)…Contd
It has been decided that every network hospital in Andhra Pradesh, both private and government has to earmark minimum 25% of the beds in each specially to Aarogyasri Patients. This has been decided at the meeting of the Aarogyasri Healthcare Trust chaired by the Chief Minister and Chairman of the Trust.
The Trust is receiving on an average 2500 calls every day through the helpline toll free 1800-425-7788. Around 800 preauthorization and 500 claims are processed daily under the scheme. Every day around 1000 patients are admitted as inpatients and another 800 patients are given consultation as outpatients across the State. As on 30th October, 8873 patients are being treated in different network hospitals.
Health Insurance – The Way Ahead
Creating awareness on Rights & Responsibilities Data Pool – Regulator as a repository Standardization of Cost -
Increased Tax benefit Removal of Service Tax Standardization of definition – a right step ahead -
TPAs Health Providers
Standard Pre-Existing exclusion defined w.e.f. 01/06/08
Gradation of Health service providers Pool for Senior Citizen Renewability / Portability Compulsory Health Benefits for organized sector Government role on mass healthcare initiatives
Pillars of change and Enablers for growth Pillars of Change Consumer Awareness Standardization of Health care costs and Accreditation norms
Enablers for Growth Product & Pricing Innovation Technology
Healthcare Infrastructure Data & Information Exchange
